warn actuaries
Although the deadline for the introduction of the European Union’s
Solvency II regulatory regime – October 2012 – may appear a long
way off, insurers should start to prepare now, delegates at The
Actuarial Profession’s recent General Insurance Research Organising
Conference were told. The Actuarial Profession is a joint body of
the Faculty of Actuaries in Edinburgh and Institute of Actuaries in
London.
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“Companies face a challenge to get the provisions in place for
Solvency II,” said Annette Olesen, who chairs a unit of the
European Council’s Groupe Consultatif, which advises on development
of solvency requirements for the EC’s Solvency II directive. “They
should be starting to think about how they are going to develop
their internal modelling capabilities and governance so that they
can meet the required standards.”
Solvency II will require companies to conduct their own risk and
solvency assessments using an internal model approved by their
supervisor or the default European Standard Formula. “This means
that every company will require an actuarial function, which could
present a significant challenge for smaller companies,” said
Kathryn Morgan, who is leading The Actuarial Profession’s response
to Solvency II.
Olesen added: “There is still a lot of work to be done before the
implementation of the directive in 2012, and there is time to
influence the decision-making process. Companies should be engaging
with these issues now to ensure that they do not get left
behind.”
